Sales up though revs dip due to price cuts
HOLLYWOOD — Videogame sales were up 5.4% in 2003, but sharp price reductions among console makers led the overall vidgame industry to a 4% decline in revenue to $11.2 billion, down from a record-breaking $11.7 billion in 2002.
According to the NPD Group, which tracks vidgame industry sales, top-selling title for 2003 was Electronic Arts’ “Madden NFL 2004,” followed by Nintendo’s “Pokemon Ruby” and “Pokemon Sapphire,” EA’s “Need for Speed: Underground” and Nintendo’s “The Legend of Zelda: The Wind Waker.”
Total industry revenue once again beat out the year’s box office receipts, which totaled $9.2 billion. Including homevideo, pay-per-view and associated hardware sales such as DVD players, however, the film industry is still far ahead of vidgames.
Decline in industry revenue came entirely from the console segment, which saw a 27% fall in dollar volume, due primarily to price competition, led by Nintendo’s one-third cut in the price of its GameCube to $99.
Software sales were on the rise, however, indicating that consumers are spending more on games for consoles they previously bought rather than on new hardware. Sales of games for consoles and portable devices were up 5.4% to $5.5 billion.
That trend is likely to shift by 2005, when Sony and Microsoft are skedded to debut next generation versions of their PlayStation and Xbox consoles.
Shift from PC gaming
There was also a continued shift away from gaming on the computer, as PC game sales revenue fell 14% to $1.2 billion.
Rounding out the top 10 in 2003 game sales were Rockstar Games’ “Grand Theft Auto: Vice City,” Nintendo’s “Mark Kart: Double Dash,” Activision’s “Tony Hawk Underground,” Atari’s “Enter the Matrix” and EA’s “Medal of Honor: Rising Sun.”
“Grand Theft Auto’s” ranking may be the most impressive, since it’s the only title of 2003’s top 10 that hit stores in 2002.
NPD analyst Richard Ow said continued price competition in the software and hardware markets made it unlikely that 2004 revenue would rise from 2003.
One segment that is likely to see an increase, however, is handheld hardware.
New Nintendo console
Nintendo, which currently dominates the handheld vidgame market with its Game Boy Advance, recently revealed that it will unveil a new handheld console at the E3 conference.
Code-named Nintendo DS, the new system will have two three-inch screens, giving players access to two perspectives on a scene at once.
Nintendo first hinted in November that it would be releasing a new gaming system at E3, the nation’s biggest vidgame conference, in Los Angeles this May (Daily Variety, Nov. 18).
Company stressed that DS will not be a replacement for the Game Boy.
However, the DS will certainly be a key part of Nintendo’s strategy to fend off new competitor Sony, which plans to enter the handheld market with a portable version of its PlayStation 2, the world’s top-selling game console, dubbed PSP.
Both Nintendo DS and Sony PSP will hit the market in time for the holidays this year.